Case Study 5

The situation

The PWC looks after their son for 5 nights per week, the other parent for 2 nights per week.

In total, they spend £80 per week on their son, perhaps a little higher than average.

The result

The PWC only spends £10.60 from her earned income on their son, because:

She receives all the Child Benefit (even when she doesn't have their son).

She receives Child Support of £27 per week.

She doesn't make any contribution for the time when the other parent is catering for their son (and neither does the state).

The NRP spends £55 per week on their son from his earned income.

The child has £52 spent on him while in the PWC's household and £28 while in the NRP's household. This suggests that child support should be about £12 to balance the amount spent. (This still leaves the benefit bias). In fact, at £27 it overcompensates significantly.

With the Fair Shares formula the child support becomes about £10 - £11. This still leaves the PWC better off because of the Child Benefit.

This is an HTML transcription of an article written in September 1999, hence the benefits rates, the references to the White Paper, etc.